11-22-2004, 01:37 PM | #41 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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In terms of an increase in salary after the initial bump, I theorize (note the word) that it would. There is no concrete evidence to support this, it is merely a belief. I believe this because I think it would be demanded, if the workers were educated enough to understand what is going on and demand the increase. I don't think that it would happen automatically. Prices vs. income. Once again, I think the market would cause a decrease in prices. All it takes is one company to lower their prices a smidgen and the rest would follow or lose business/revenue to the first company. Any company with a brain would realize this potential for increased revenue without a corresponding decrease in profit. The first ones to do this would be the short-run winners (i.e. following the kinked demand curve). But as I mentioned before, most information and ideas presented here are theoritical. Since it has never been done here, there is no evidence to say 100% one way or another. All I know for a fact is that the current system is failing miserably. We can be pre-emptive and fix it early, or wait for it to get worse (which it does every year). |
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11-22-2004, 01:47 PM | #42 (permalink) | |
Insane
Location: Missouri
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11-22-2004, 01:53 PM | #43 (permalink) |
Junkie
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It just seems to me that most companies would just pocket the payroll tax, or use that money to offset the loss of profit due to lowering prices. Again, the company isn't obligated to return the cash to the workers.
I don't work for Microsoft, but by reading the papers I found out about their cash surplus and what they were planning on doing with it. Why weren't workers there arguing for higher pay? Relying upon workers to force the hand of a business is rarely effective. Most people don't currently understand that businesses have to pay approx. double of their pay in various payroll taxes, why would they understand not having to pay it? At best, I could see it forstalling some layoffs, but I think even that is doubtful. Again, a consumption tax might work in a true free market system, but that isn't what we have. Honestly I don't know of anyplace with a free market system. One of the most important things necessary for a free market economy to work efficiently and hold up to many theories is perfect information for all participants. And that is one thing almost always lacking, which gives those with more information (and usually higher income/money) more power in dealing with those without all the information. |
11-22-2004, 01:56 PM | #44 (permalink) |
....is off his meds...you were warned.
Location: The Wild Wild West
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aliali -
First, income isn't related to it all. The first $18K for a family, $9K for an individual is tax-free; everyone gets this credit. The current proposals seem to revolve around two different ways of handling this: rebate or prebate. One proposal has a prebate being sent out at the beginning of each month. The rebate proposal shows the rebate amount being first applied to other payroll taxes (i.e. rocking chair, medicare) and the balance being paid back at the end of the year. Does that answer your question? |
11-22-2004, 02:04 PM | #45 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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First, our populace needs to be as educated on this issue as possible. Not an easy task, but a necessary one regardless of the type of tax system in place. I would also assume that some "rules" would apply. Not every company would increase salaries because of the new found money, but some would. The companies that recognize this and increase salaries would then be the "hot" companies to work for. Competing companies would then have to "shit or get off the pot." All it takes is a few companies to recognize this and the ball would start rolling. And, I honestly believe that some companies would do this and start the trend. As to the free market idea. Philosphically speaking, there is no such thing as 100%. Using that argument, there is no such thing as a totally free market. The best we can do is to try and achieve free market status and I think the U.S. is ahead of the curve on this. In terms of the availibility oif information, I see that trend changing dramatically every day. |
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11-22-2004, 06:50 PM | #46 (permalink) |
....is off his meds...you were warned.
Location: The Wild Wild West
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Edit: there seems to be many different ways of defining "regressive tax".
That being said. Is there no one else to chime in? I would like to hear as many opinions as I can. If you are for it, why. If you are against it, why? If you are against it and think the current plan is failing, what do you recommend that we do? Thanks, Last edited by KMA-628; 11-22-2004 at 07:01 PM.. |
11-23-2004, 08:27 AM | #47 (permalink) | |
Insane
Location: Missouri
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Prebate doesn't seem to make much sense. Sending out checks all the time would breed fraud and you would never know how much to send (can't predict consumption) and what happens when someone dies, moves, goes into a coma, leaves the country for a semester, etc. Too much hard work. If you have a rebate system, then lower wage people have to pay the tax and wait for a refund. The Gov't wouldn't know how much to refund unless a record of the consumption is provided. Or does the country simply send out checks assuming the consumption levels to be 18k per family and give each family X% of 18k in monthly or yearly installments? If this in the case, are we really going to have the gov't send JFKerry and GWBush checks? Aren't there real fraud concerns here? How old to you have to be to get your check? Do you have to be a citizen? Do visitors get rebates? If not, what is this going to do to tourism? If you fly into any big city, you already pay extraordinary taxes on your hotel room and rental cars, does 20-odd% get added on top? Can you work overseas and get a check? What about servicemen stationed abroad? What about foreigners on student visas? Since this will be the primary source of funds for the gov't, will there be a crackdown on compliance that will accompany the million and six different ways people try to get around this--in kind transfer, garage sales, ebay, etc. What are the other economic implications of assuming a minimum level of consumption for all citizens and rebating a check in that amount to everyone: rich, poor, sick, healthy, monk, priest, new yorker, arkansan, old, young, family of 3, family of 13? Last edited by aliali; 11-23-2004 at 08:31 AM.. |
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11-23-2004, 02:00 PM | #48 (permalink) |
Tilted
Location: MI
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As bad as the current tax code is, I'm terrified at the thought of our current leaders rewriting it. It will favor the rich, pure and simple.
That's not the way they'll present it, of course; we'll hear that simpler = better, flatter = fairer, calculated rephrasings like "death tax," claims that the new system will help grow the economy and allow the elimination of the IRS, etc. The end result will be that the middle class will be screwed. Politicians will remove taxes on things the rich enjoy, such as capital gains and dividends. They'll allow corporations to pay less, maybe even nothing. The poor will be protected by some threshold or rebate. The only people left to tax will be us in the middle class. And my fellow Americans will take the bait. They'll swallow the arguments and embrace a regressive tax that will end up costing them money. How do I know? Because they believe so many other false claims made by this administration, such as "we invaded Iraq as part of a war on terrorism."
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Ceci n'est pas une pipe. Last edited by abscondo; 11-23-2004 at 02:04 PM.. |
11-23-2004, 02:32 PM | #49 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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A few questions to you: 1) If it is broke, who gets to fix it? Politicians as a whole fall under the "rich" category, Republican or Democrat. If the "current leaders" cannot be trusted to do it, who can? Congress is the one to propose and implement a plan, and their status won't be changing much over the next several election cycles. 2) How does this plan hurt the middle-class more. I am, by definition, middle-class. I took a very long look at the numbers and I will be better off under a consumption tax. I hear this argument over and over, but I haven't seen anything to lend credence to it (i.e. show numbers). It should be obvious that I have gone to great lengths to understand my side of the argument. Why can't anybody come back with something more than talking points? You say I will be hurt more, but how? If I am missing something here, I would like to be made aware of it. Here is an example of the opposition points that annoy me. I want details. I want to hear more than "what", I want to hear "why". So far, the only person remotely doing that is kutulu. Editorial Masquerading as a News Article I really, really want to discuss this, with anybody. I don't want to seem like I am trying to knock everybody down, I am trying to pose my side of the argument with in-depth analysis and understanding of the topic. I have said this over and over, but if there are "real" points of contention, I would like to be made known of them. In other words, I need more than talking points. i.e. - The middle-class will get hurt under this plan followed by an understandable example, preferably with some numbers (since this is a topic of numbers) to back-up the claim. |
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11-23-2004, 02:56 PM | #50 (permalink) | |
Tilted
Location: MI
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Falling Flat: The Dubious Case for the Flat Tax http://www.epinet.org/Issuebriefs/fallingf_ib_1996.pdf Many Middle-Class families Will Wind Up as Net Losers From the "Middle-Class" Tax Cut Legislation http://www.cbpp.org/9-21-04tax.htm The Decline of Corporate Income Tax Revenues http://www.cbpp.org/10-16-03tax.htm The Ultimate Burden of the Tax Cuts http://www.cbpp.org/6-2-04tax.htm
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Ceci n'est pas une pipe. |
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11-23-2004, 03:20 PM | #51 (permalink) |
....is off his meds...you were warned.
Location: The Wild Wild West
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Well, I was hoping for an argument posed in someone's own words, not links to articles written by someone else (I don't do this for a living either, it is merely a "hobby").
Of the links, only one dealt with tax reform and it doesn't deal with the type of plan I am proposing. The other links are articles I read some time ago denigrating tax cuts. Tax cuts are not the argument here. Plus, the articles are devoid of some very important information relevant to the argument they are making, which is a totally different topic than being discussed here (in other words, they won't fly with me - case in point, article #3, referring to declining corporate tax revenue compares pre 9/11 to post 9/11. It completely ignores any mention of a recession or of any of the economic effects--of which there were many-- of 9/11. It also fails to mention that personal income tax revenue has gone up considerably--anyway, as I said, a different argument) The best part about the first link is that it mentions that there isn't any empiracle evidence to support a "flat tax". Well, duh. There isn't a similar system to use as evidence, so, obviously there isn't any empiracle evidence. What kind of evidence did we have in 1908 when the current system was put into place? Or after WWII when it was enormously expanded? But we did it anyway, didn't we? Let me try again, maybe someone else will answer: If the plan I am referring to will hurt the middle-class more than they are being hurt now, how will that be? As I have stated before, I used myself as an example (and no, I am not posting the numbers--I did, however, post hypothetical numbers that are similar to mine) and have come out on the positive side in this argument. Since I am solidly middle-class, how will I get hurt? If there are serious problems or things that need to be considered regarding a consumption tax, I really, really want to hear them. Please make your argument specific to the points I mentioned and please make the argument in your own words, backed up with links if you so desire. Anyone can post a link, I would like someone to join this discussion that has thought about this idea and has a well-formulated opinion about it. Last edited by KMA-628; 11-23-2004 at 03:22 PM.. |
11-23-2004, 03:57 PM | #52 (permalink) | |
Easy Rider
Location: Moscow on the Ohio
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How can we possibly evaluate a new tax system when we don't know what the existing one is costing us now. Please see my posts #35 and #38. I don't think anyone else knows either or at least no one has come forward with an answer. If we got rid of all other taxes and replaced them with a consumption tax, it may have to be as high as 300%. So I will ask again. How much of the current price of goods and services is included because of all the businesses involved passing the taxes up the ladder until the consumer eventually pays them all (indirectly) because they are included in the final price? Add how much a typical middle class family pays in indirect taxes this way to your estimate of 50% and we will have a starting point to evaluate from. I have searched the net to no avail and was hoping a business major or tax pro could answer this. Surely they cover this kind of thinking in business schools. |
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11-23-2004, 04:03 PM | #53 (permalink) | ||
Loser
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You weren't asking me specifically, but I'll answer these two questions anyway.
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Let's take two people. Person A makes $50,000 and Person B makes $500,000. Under the current plan, A takes home approx. $40,000 a year and B takes home approx. $450,000 a year (considering B funnels his income through a corporation to decrease his tax base - i.e. a loop hole). Under your plan, A takes home all $50,000 and B takes home all $500,000. Meanwhile, A spends $35,000 on consumption-taxable goods, minus the $18k free-zone, that leaves $17,000 in taxable money - at the very conservative 20% you have suggested, that means $3400 in taxes. Or, a 7% tax rate. B, on the other hand, spends about $100,000 of his income on consumption-taxable goods, minus the $18k free-zone, that leaves $82,000 in taxable money - at the very conservative 20% you have suggested, that means $16,400 in taxes. Or, a 3% tax rate. Welcome to regression. |
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11-23-2004, 04:16 PM | #54 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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Also, when I made $50,000/yr, my take home was less than $40,000. I see where you are getting at, but I am not too sold on the numbers being used. |
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11-23-2004, 04:18 PM | #55 (permalink) |
Muffled
Location: Camazotz
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The problem, KMA, is it's complicated to do. But I've got 25 minutes while Simpsons is on, so here goes.
I'm going with a 4 person family where only one parent works, both children are under 17, the worker makes 40K, putting 3K into tax-deterred retirement plan, neither of the children has expensive orthodontia and the family doesn't give anything to charity...you see the problem. I agree that taxes as they are needlessly complicated (the manual for preparing your 2004 return is three hundred and twenty two pages) but that makes it difficult to analyze whether a national sales tax is better for the average family. With taxes dropping so much under this plan, the government would be bankrupt in a few years.
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it's quiet in here Last edited by Kadath; 11-23-2004 at 04:27 PM.. |
11-23-2004, 04:21 PM | #56 (permalink) | |
Loser
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I believe you may get the point: the more money you make, the less of it as a percentage you will spend on consumption-taxable goods. It's built-in regression. |
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11-23-2004, 04:25 PM | #57 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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However, doesn't one spend more if one makes more? Obviously there is no way to prove this, i just look around to emphasize my point. I shop at Wal-Mart and they shop department store. I justify this plan by thinking that the more money one has, the more one is likely to consume. I know I would if I had more disposable income; in my dream world, I would be the perfect consumer for this type of plan. So, with that thinking, it may not be regressive, if the consumption is enough (which, as I mentioned, there is no way to prove). |
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11-23-2004, 05:16 PM | #58 (permalink) |
Loser
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Certainly, people spend more if they make more - but not proportionally to the increase in the amount they make. That's why we have things like the stock market and 401k's and mutual funds and venture capitalists and various other forms of investment. Because the millionaire doesn't use as much, proportionate to their income, in toilet paper as the 25 thousandaire. They both use about the same amount. After the essentials, you have the "fun" stuff - TV's, cars, boats, etc. The millionaire is going to pay more for high-ticket versions of these things, but not enough more to come close to keeping pace with the disparity in incomes.
It's much easier to spend a million bucks than it is to make a million bucks. And a millionaire knows that. Their lifestyle will not be 20 times greater than someone making 20 times less. It'll be somewhere around 5 times greater. (Again, I'm making up numbers to demonstrate the point.) |
11-23-2004, 05:34 PM | #59 (permalink) |
....is off his meds...you were warned.
Location: The Wild Wild West
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Well Manx, we are going to differ here because I don't know of any rule that says how much someone should pay in taxes. With either the current system, my proposal or any other proposal I have seen; the rich will always (b) make more than me and (b) pay more in taxes than I do. And "fair" is impossible to define in this realm. The rich person is always going to have more money than me, before and after taxes. So the question is, how much a burden should the "rich" have? Once again, there is no rule. I am not a redistributionist, so I am not in favor of the "rich" paying for me, I am in favor of me paying for myself. We could run in circles for hours about how much a rich person should make, and never, ever come to a conclusion. My bottom line: will the proposed system bring in enough money?
I looked at it back to front first. First, how much money do we need to take in? Then, where can we get that money that would be simpler and possibly more effective. This system does just that, plus it gives a free ride to the poor--they will have no burden. And, using my figures, the middle-class will pay less as well--a definite bonus in my book. Add that together with a system that could (and these are assumptions): (a) be more succesful (b) Be much simpler (c) be harder to cheat (d) be more "fair" than our current one (e) and be beneficial to our economy as a whole which is beneficial to anyone that wants to do better with their lives. |
11-23-2004, 05:45 PM | #60 (permalink) |
Loser
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I don't consider higher taxes on the rich as "paying for me". I consider it to be their paying for the priviledges they have gained in society.
I also do not know how much the rich should be taxed. I do know that they should be taxed at a higher rate than someone making less money. As for the figures - I do not believe that eliminating the majority of the infrastructure we currently use to enable our tax system, will we gain enough savings to lower everyone's taxes - but even if that were true, I certainly oppose lowering the taxes of the upper class to something lower than the middle and lower classes. |
11-23-2004, 07:46 PM | #61 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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2) With this system the lower classes pay nothing, so there is nothing to bitch about there (unless you are a redistributionis, which I suspect you are). The middle-class tax burden goes down, who cares how it compares to other income brackets, it went down. How can anyone complain about that fact? I suspect that the root of these oppostions fall heavily into the socialistic realm, which I will never enter, let alone consider. So far, from what I have seen, the advantages of such a system measurably outweigh the disadvantages. And they blow any possible advantages of our current system out of the water. However, if you are coming from the belief system that I suspect that you are, no tax reform will be acceptable to you unless the "rich" pay marginally more in taxes than they are doing now. I don't throw my support behind a system using those ideals. My checklist is much more specific and devoid of ideals. It's more of a "works or doesn't work" kinda thing. |
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11-23-2004, 08:30 PM | #62 (permalink) | ||||
Loser
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11-23-2004, 09:39 PM | #63 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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What I don't understand is that you point out problems that we have under our current system and then say it is fine. The disadvantages claimed by you were created, or at least allowed to grow, under the system we currently have, so I don't get that argument at all. Also, for the record, a consumption tax is NOT a REGRESSIVE tax. It would be a proportional tax if it didn't have the rider in it for lower incomes. Since it does account for lower incomes and provide for "free spending", it is, by economic definition, a progressive tax. By this I mean, the rich will pay more than the middle-class, the middle-class will pay more than the poor. Proportionately, the rich may pay a lower percentage of their income, but that fact does not come into play when defining a tax as "regressive", "Progressive" or "Proportional". (yes, non-economically speaking, it may be similar to the definition, but that definition is not accepted in economic circles). /silently wishes onetime2 was around, sometimes his input is invaluable, but I understand the absence and wish him the best of luck |
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11-23-2004, 09:55 PM | #64 (permalink) | ||
Loser
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Well - what we have works. So I don't understand why you would want to implement such drastic changes unless you view it from your own idealistic perspective. Quote:
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11-23-2004, 10:48 PM | #65 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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When every attempt to simplify the system makes it more complex. When thousands of taxpayers lose out on millions of dollars because they don't understand the system. When 46 tax professionals come out with 46 different answers, with a difference being more than $30,000....for the same tax return. When the gov't itself admits that nobody understands the system. When the amount of taxpayers increased 12%, but the number of calls to the IRS for help tripled.....even with the advent of custom software to prepare taxes. I say the system is broke and broke bad (poor english on purpose). On that same argument, I will also admit that there is no "perfect" tax system that will please everybody. I then sacrifice some of my ideals for a system that would at least be an improvement to the one we have rather than give up and accept a monstrosity. This system is so simple that only the people that need to pay attention to the warning label on a chainsaw that says "don't stop chain with hand" could be confused. Hell, even a flat tax would be an improvement over what we have now. With a consumption tax, there is no more worrying about how the forms are filled out, were the correct deductions included, will the gov't accept this deduction and not this one, etc. Everytime you shop, you take a bite out of your tax burden. And the best part is that it would be a smaller bite than the one currently taken, for virtually all people. |
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11-23-2004, 11:12 PM | #66 (permalink) |
Loser
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Simplification for the sake of simplification is not a solution.
Although there are an assortment of real problems with our tax system - we are still the wealthiest nation in the history of the world. It does work. It may not be simple, it may not do all that is should - but it works. Maybe a complete overhaul is necessary to make it work and make it simple and have it do what it should do. I don't see that in the consumption tax plan. Primarily because it no longer does what it is a major piece of what it should do: target the wealthy. |
11-23-2004, 11:20 PM | #67 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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I highlighted this because it points out a fundamental difference between us, one that more than likely, cannot be breeched. If you have read any of my other posts you should know that I would never subscribe to this philiosphy, nor would I propose or lend my backing to a plan that had the basis of "target the wealthy." Ironically, I am not even remotely rich, yet I do not lend credence to this thinking. By my own definition, I am a conservative economist who will someday be rich (yeah right, eh?). It seems, my friend, that we have reached an empass. |
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11-23-2004, 11:25 PM | #68 (permalink) |
Loser
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I described my reasoning for targetting the wealthy in the first section of post #62.
I haven't had many people attempt to argue those points with me - typically, a conservative will stick with the common "fairness" aspect as it applies exclusively to money. (And, typically, a liberal will not attempt to argue those points, whether they understand them, agree with them, or not.) Maybe someday someone will discuss it in the proper and full context: power. Until then, yes - we have reached an impasse. A very nice conversation it was. Thank you for broaching it and in the manner you did, KMA. Last edited by Manx; 11-23-2004 at 11:30 PM.. Reason: god told me to do it |
11-23-2004, 11:31 PM | #69 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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I knew I was spelling "impasse" wrong, but I couldn't even find the correct spelling at dictionary.com (empass and impass returned nothing, I forgot the damn "e" at the end). See, a minor thing, but I am the wiser for it. Enjoy your evening, or what is left of it. As my work for the day is now finished, I start my cocktail hour (early training for when I am good and rich). |
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11-24-2004, 12:41 AM | #71 (permalink) | |
Junkie
Location: Right here
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Manx' definition of regressive tax (his example to you) was the definition I learned in my social inequality courses. That's the definition that social scientists use. A regressive tax is understood to occur when a person's tax liability (as a proportion) decreases as their income increases. I also double checked various internet definitions to see if there were common parlance usages. I couldn't find any that differed from the 'academic' definition. Where did you learn your definition? Is it based on what you think regressive means (as in 'unfair') and progressive (as in 'fair')? I used to speak to an economist when I ran his student lab. He was always talking about how to fix the tax situation in Oregon (it doesn't have a sales tax). He claimed that the best solution was to raise the groce receipt taxes. I can't remember if he was talking about grocery receipt taxes, but I think so. If I have more time and can remember all the details, I can return and flesh it out. But I'm supposed to be working on my Master's right now! There is strong historical evidence that capitalists will keep their wealth, not spend it. They need to invest it, first of all, in a capitalist society. Those are the rules of the game in order to keep the pie growing. They have to capitalize their profit. I don't want to remake the wheel, so if you happen to be in a library grab Empire by Hardt and Negri. They do a quick rundown of how this plays out. If you happen to grab that book, the pages are p. 222-228. I'll try to scan them later if I have time. Also, how I define fairness in taxes is by how much resources one consumes. So I think people should pay taxes on the percentage commensurate with their wealth--not income. I have posted in another thread explaining how I view the use of resources and infrastructure. Briefly, workers subsidize the owners, not the other way around. This operates even outside the issue of infrastructure. For example, you asked about a number of things. The government uses public money to support private corporations. We call it subsidies or bailouts. This occurs when they want to do ventures, research drugs or many other technologies, and when they end up stealing from consumers (as was the case with S&L and energy scandals). What I find interesting is that I have no problem with loaning or incentivizing corporations to research and develop. But once they hit something good, the public coffers should get a percentage of return. Either through straight repayment of capital invested, or via royalties. This is what any private lender does, so I don't see what the issue with that would be. I would also like to see a particular tax on wealth that would urge reinvestment of the liquid capital. I believe this is the foundation for property taxes, to urge people to use the land productively and not just sit on it. And I don't think our society has a moral or fairness issue with property taxes as long as they aren't putting people out of home. So I think our public would be willing to come to terms on a wealth tax on the same premise. Philosophically, or theoetically, we should encourage people to invest, but not punish them if they choose to consume. We need consumers to keep the pie of capitalism warm. Taxing on consumption seems to penalize consumers for what we need them to do. I'm not convinced that we can restructure our tax code to reduce taxes for everyone. Some things I've read make me doubt that to be the case, but mainly I just don't want to risk a shift that large without some positive evidence. I would consider meeting part-way, however. For example, if we used a self-sufficiency standard instead of the current poverty threshold, I would be amenable to a consumption tax to see how it pans out for temporary. That would mean that in Orange County, you would agree to exempt my first $38,000. That is the researched figure that I would need to meet my basic needs: housing (2 bedroom for a family of 4), food, clothes, transportation, & etc, That amount doesn't allow me to go hog wild out on town. Housing wacks about 24K right off the bat. So you can start thinking to yourself how far the other 14K would get me--especially if you want me to save for my healthcare and retirement each month (and childcare hopefully). Whatever disposable income I have left would be spent on necessities. All this so I can continue coming in to work each day. And the less stressed I am, the more productive I am liable to be. Given that I create the profit, making compromises like this seems to be in their long-term interests, as well.
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"The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann "You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman |
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11-24-2004, 12:57 AM | #72 (permalink) | ||
....is off his meds...you were warned.
Location: The Wild Wild West
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From Roger Miller, economist
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11-24-2004, 01:01 AM | #73 (permalink) | |
....is off his meds...you were warned.
Location: The Wild Wild West
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First, you have to re-do your numbers to match the plan I am referring to, as housing would not be included. I believe that healthcare would be exempt, but I will have to check. So, I think that the $38,000 number would be a wee bit high. Anyway, the idea behind any threshold is to be more "fair". |
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11-24-2004, 01:40 AM | #74 (permalink) | ||||
....is off his meds...you were warned.
Location: The Wild Wild West
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By the way, I was wrong about housing:
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11-24-2004, 01:57 AM | #75 (permalink) | |
Loser
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In the example I gave above, Person A/Person B, the 7% and 3% tax rates are not real tax rates, the real tax rate is 20%. The 7 and 3 are comparative tax rates to the income-based tax system. In essence, we look at how much consumptive tax is paid by each person and view that as a percentage of the income. It certainly is an analysis along the lines of our current system applied to an entirely different system. But at the same time, the result of the analysis is applicable as a comparison to our current system. As your source stated, consumption spending does not increase equivalent to an increase in income, which I have mentioned a few times now. It offers a remedy of adding in an essentially arbitrary number (poverty level) to bring back some of the progressivity it had eliminated. The effect is nothing more than an artificial crutch for the failings in the consumption-based tax plan. Maybe there's a term for it, but if you think of a curve on a graph, the arbitrary number simply levels out, flattens, the first segment, then the curve continues on it's way, unadjusted. (The curve being the regressivity of the tax system.) Maybe smooth's suggestion of localized cost of living would be more applicable than poverty level - but it would still be an artificial crutch for the system. Speaking of this arbitrary number - where did they come up with the poverty level as the number that would be appropriate? If the system is based on consumption, why is the "fix" to the flaw in the system a number based on income? Last edited by Manx; 11-24-2004 at 02:04 AM.. Reason: monkey rode a blade on an overhead fan |
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11-24-2004, 09:50 AM | #76 (permalink) |
Junkie
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Adding sales taxes to houses and rentals would be terrible. Real estate is one place where prices will not go down. All of a sudden your amount financed goes from 200k to 240k.
To make things worse it would only apply to people who purchase a house AFTER the tax goes into effect, meaning first time home buyers and current renters get screwed the hardest. The only way to remedy that would be to retroactively add a tax to all currently owned homes. As if that would happen. |
11-24-2004, 11:11 AM | #77 (permalink) | |
Junkie
Location: Right here
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Keep in mind that it isn't the "more you earn, the more you pay," but rather the "more you spend the more you pay." My main point about the poverty "fix" is that the current threshhold is artificially low. I don't like the plan you are outlining, but if it were to work in any way, the poverty threshhold would have to be reevaluated. Diana Pearce is a sociologist on the faculty of the School of Social Work at the University of Washington. She created the Self-Sufficiency Standard when she was Director of the Women and Poverty Project at Wider Opportunities for Women in Washington DC. If you google her name and "self sufficiency standard" you'll get a lot more info on this aspect, which I hope you'll find interesting and illuminating.
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"The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann "You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman |
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11-24-2004, 12:02 PM | #78 (permalink) | |
Junkie
Location: Right here
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Here is an exploration of the NST issue from the other side of the aisle:
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KMA, do you see why Manx and myself understand the NST to be a regressive taxation structure? Do you agree with us? The article you provided doesn't dispute the regressive nature of the NST, but rather attempts to patch it to reduce the regressivity within it. It's important to note who the audience of that position paper is directed toward. The assumption made before the model was created is that someone is paying too much tax. So the model attempts to answer the question of how do we reduce the tax burden on that particular payer and implement a more fair system. The attempt is not to reduce taxes for everyone. I didn't see it in that paper, but hopefully CATO didn't say it would--because that would put them in a pretty untenable situation. I was surprised when you asked how this would negatively affect the middle class. Restructuring the tax burden is not going to lower taxation for everyone; instead it will move that burden around because it is a discussion on where, not whether, the burden should fall. When I say something like that study came from CATO or this one comes from the Progressive Center, I'm not asserting one should reject one in favor of the other based on that information. But one must evaluate the assumptions the authors are operating under and who their target audience is. Neither the CATO position nor the Progressive Center's position is attempting to solve an objective problem. They are both trying to solve a problem for their respective audiences. Without knowing your specific income situation, I can only guess whether you are the intended audience of the CATO Institute. Have you taken all your receipts from the past ten years (including housing )? That average would give you a more clear picture of your expected burden. But if you don't have those figures, at least roughly figure the past few years before deciding that you wouldn't be economically harmed by this shift. If you find that you are not, it's important to realize that the goal of this position is to reduce the tax burden on the wealthy. If your taxes are reduced and/or remain stable, but the wealthy taxpayers' burden is reduced, then we need to add a new phenomenon into the equation: where does the government make up lost revenue. The historical answer has been to increase fees. So this means that if you like to go to national parks or go gaming or other recreational activities, you might pay $60 dollars for your fishing license instead of $24. Park entrance rises from $10 to $30 per day, for example. These costs need to be figured into your share of the burden of the cost of government services. Another part that needs to be figured is how state's will receive money. Will they charge a per usage fee for police assistance, or will they just raise overall rates? Now, it's important to watch where the position claims loss of revenue is going to come from. They may claim that there will be no loss of revenue. That is, maybe the market will produce enough to make up for the loss. But we can look at the historical record to interrogate the probability of that. The important thing to note is whether the position gives a good enough account of where the increase is going to come from. Even if the position believes the market will make up for the decrease, it ought to provide an alternative scenario in case the market doesn't adjust or provide enough. If it doesn't, why not?
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"The theory of a free press is that truth will emerge from free discussion, not that it will be presented perfectly and instantly in any one account." -- Walter Lippmann "You measure democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists." -- Abbie Hoffman |
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11-25-2004, 06:23 AM | #79 (permalink) |
Conspiracy Realist
Location: The Event Horizon
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Abolish the IRS and break all ties with the Federal Reserve Bank for starters.
Here's a few sources to view the different angles. 1 2 3
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To confine our attention to terrestrial matters would be to limit the human spirit.- Stephen Hawking |
11-25-2004, 06:58 AM | #80 (permalink) |
Human
Administrator
Location: Chicago
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Sun Tzu beat me to it. The more I slowly learn about the Federal Reserve system, the more disturbed I become.
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Le temps détruit tout "Musicians are the carriers and communicators of spirit in the most immediate sense." - Kurt Elling |
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current, replace, system, tax, upgrade |
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